Energy bills to drop by £437 a year from July, experts say

The price cap on bills could fall by more than £1,200 for the average household when it is next updated, experts believe.

But because the Government’s support, which has artificially lowered bills, will fall away, households will only be around £437 better off per year on average.

Energy industry consultancy Cornwall Insight analysed the data.

Their experts said the price of electricity will drop to 29.55p per unit from the start of July, from 33.2p today with Government support.

Gas prices will fall from 10.3p today, including Government support, to 7.55p from July.

It will mean that the average household pays around £2,063 per year for their gas and electricity, though this will vary based on how much energy they use.

The price cap will be changed again in October to bring the average bill to around £2,098, before hitting approximately £2,163 next January. The current Government support means that average bills are around £2,500.

Dr Craig Lowrey, a principal consultant at Cornwall Insight, said energy suppliers might start offering more deals that lock customers into a fixed price for a year or more.

These deals could give customers certainty over the price of their energy bills, and protect them if prices start to rise. However, it is a gamble for households because if they lock in a price and energy costs fall further, they could be left out of pocket.

Dr Lowrey said: “As the wholesale energy market has levelled out in recent weeks, our predictions for the price cap have followed suit.

“Some energy suppliers will potentially look to leverage this opportunity to bring back fixed tariffs on or around the price cap, with stable projections lowering concerns they will lose out over the fixed term.

“This potential re-emergence of competitive tariff propositions presents an opportunity for households to finally get a grip on their energy bills, having been hit hard by the energy crisis. While this seems positive, fixing energy tariffs is a gamble. The market may go down as well as up, and households run the risk of getting locked into bills higher than the price cap.

“We are faced with several uncertainties as we look beyond the July price cap, with ongoing consultations that could potentially bring changes.

“What we do know is while energy bills may begin to stabilise, they are still far from returning to pre-2020 levels. While consumers may feel more secure, we must not under-estimate the fact that these bills remain unaffordable for many households.”

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